Correlation Between SERI INDUSTRIAL and Magna International
Can any of the company-specific risk be diversified away by investing in both SERI INDUSTRIAL and Magna International at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining SERI INDUSTRIAL and Magna International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SERI INDUSTRIAL EO and Magna International, you can compare the effects of market volatilities on SERI INDUSTRIAL and Magna International and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in SERI INDUSTRIAL with a short position of Magna International. Check out your portfolio center. Please also check ongoing floating volatility patterns of SERI INDUSTRIAL and Magna International.
Diversification Opportunities for SERI INDUSTRIAL and Magna International
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SERI and Magna is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding SERI INDUSTRIAL EO and Magna International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magna International and SERI INDUSTRIAL is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on SERI INDUSTRIAL EO are associated (or correlated) with Magna International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magna International has no effect on the direction of SERI INDUSTRIAL i.e., SERI INDUSTRIAL and Magna International go up and down completely randomly.
Pair Corralation between SERI INDUSTRIAL and Magna International
Assuming the 90 days trading horizon SERI INDUSTRIAL EO is expected to generate 1.97 times more return on investment than Magna International. However, SERI INDUSTRIAL is 1.97 times more volatile than Magna International. It trades about 0.02 of its potential returns per unit of risk. Magna International is currently generating about -0.02 per unit of risk. If you would invest 255.00 in SERI INDUSTRIAL EO on September 15, 2024 and sell it today you would earn a total of 16.00 from holding SERI INDUSTRIAL EO or generate 6.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SERI INDUSTRIAL EO vs. Magna International
Performance |
| Timeline |
| SERI INDUSTRIAL EO |
| Magna International |
SERI INDUSTRIAL and Magna International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SERI INDUSTRIAL and Magna International
The main advantage of trading using opposite SERI INDUSTRIAL and Magna International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SERI INDUSTRIAL position performs unexpectedly, Magna International can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Magna International will offset losses from the drop in Magna International's long position.| SERI INDUSTRIAL vs. Apple Inc | SERI INDUSTRIAL vs. Apple Inc | SERI INDUSTRIAL vs. Apple Inc | SERI INDUSTRIAL vs. Apple Inc |
| Magna International vs. SERI INDUSTRIAL EO | Magna International vs. Jacquet Metal Service | Magna International vs. Strategic Investments AS | Magna International vs. LION ONE METALS |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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